Asia Maritime

US Defense Strategy May Be On The Wrong Track, Leading Consultant Firm Says

June 30, 2016

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America’s strategy to focus on innovation in defense development may be misguided, according to a report from the world’s second largest consulting firm.

In its 2016 Global Defense Outlook report, powerhouse consulting giant Deloitte summarizes trends in defense commitments around the world. Deloitte notes that technological superiority may give less of an advantage than the size and productivity of a fighting force.

Deloitte says when countries have similar defense capabilities, “it may be productivity, rather than novelty, that conveys actual military advantages.”

Recent tensions in five major risks prompted Deloitte to recommend a shift in defense strategy. Russia’s confrontation with NATO, China’s military buildup in the South China Sea, threats of terrorism from the Middle East and Africa, would-be nuclear powers like North Korea, and vulnerabilities in cybersecurity are identified as “fault lines” which could erupt into dangerous conflicts, according to Deloitte.

“Emerging fault lines appear to be increasing risks of accidental conflict through miscalculation, errors in judgment, or unintended confrontation,” the report says.

While the U.S. has focused on a strategy of innovation to gain advantage over other countries, the sharing of technology between nations has also increased. Last January, Deloitte reported that the sales of U.S. defense technology to foreign governments is rapidly increasing. In 2015, the U.S. secured $46 million in foreign military sales contracts, more than double the amount received in 2010.

“The level of advanced technology on either side of the fault lines is converging with fewer differences in precision guidance, stealth, satellite navigation and nuclear warheads,” Nick Wakeman wrote in Washington Technology.

Global defense spending is likely to remain at “moderate” levels for the next five years as countries like the U.S. focus more on gaining technological advantages rather than according to a report by one of the world’s largest consulting firms.

Deloitte predicts that the global defense industry will continue to be worth around $1.6 trillion through 2020. However, China, Australia and South Korea and nations throughout the Asia-Pacific will increase defense spending over the next five years.

Most countries are not actively increasing their defense posture, but, as General Charles Wald, vice chairman and Federal Practice Senior Advisor of Deloitte, said, “Even as commitments to defense continue to moderate worldwide, economic forces are creating significant new tensions among military powers.”

“Some 41 countries, including the United States, Russia and China have held the line, or lowered their overall commitment to defense,” Jack Midgley, Asia Pacific Region Public Sector Defense leader for Deloitte Global said in a statement.

It is possible to improve the defense posture on a budget. Deloitte recommends that policymakers focus on “productivity” rather than just new technology. “If resources are limited, marginal investment may well prove to be more valuable when applied to basic productivity enhancements like recruiting and retention.”

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